Pan Orient Energy Corp.

Pan Orient Energy Corp.

October 11, 2011 08:30 ET

Pan Orient Energy Corp.: Operations Update

CALGARY, ALBERTA--(Marketwire - Oct. 11, 2011) - Pan Orient Energy Corp. (TSX VENTURE:POE)


Concessions L44, L33 & SW1 (Pan Orient 60% working interest and operator)

NSE-F6 Development Well

Currently on production at a rate of approximately 1,000 BOPD gross (600 BOPD net to Pan Orient) from the main volcanic reservoir within the NSE-F1 field. This is the first high rate well drilled at the NSE-F1 field, with two previously drilled wells testing initially at less than 60 BOPD gross (36 BOPD net to Pan Orient). We are very encouraged by this result and plan three follow-up appraisal wells prior to year end.

WBEXT-1DST2 Development Well

Well currently on production at a rate of approximately 80 BOPD gross (48 BOPD net to Pan Orient) from the WBEXT WBV1 volcanic reservoir.

L44-G2ST2 Appraisal Well

Well has been suspended for future sidetrack after recovering oil at sub commercial rates, with no water, from what is interpreted as the main NSE North volcanic reservoir at a structural position approximately 60 meters below the oil / water contact for the NSE field estimated in determining proven, probable or possible oil reserves in the reservoir evaluation at December 31, 2010 ("3P" reserves). This result is very encouraging and the going forward task for this field will be focused on identifying locations with better reservoir development within the structural closure.

POE-6B Development Well

Well currently on production at approximately 30 BOPD gross (18 BOPD net to Pan Orient) from the "G" sandstone reservoir within the POE-6 field.

L33-2A Exploration Well

Well is currently drilling ahead towards the deep WBV2 volcanic objective beneath the existing L33 WBV1 field in Concession L33. Drilling is anticipated to be completed in the next 5 days and testing, if justified, would commence shortly thereafter.

Drilling & Operations in Concessions L44, L33 & SW1

The success of the NSE-F6 development well will see three additional appraisal wells drilled in the NSE-F1 field combined with the drilling of an additional five volcanic reservoir development wells at the Bo Rang, NSE North and WBEXT (WBV2) fields, and one horizontal sandstone development well at the Wichian Buri field.

Delays in the granting of Environmental Impact Approval for 15 wells targeting the "D" and "E" sandstone reservoirs within the boundary of the WBEXT field will push the start of that sandstone development drilling program at WBEXT into January 2012. As a result, the focus between now and year end will be on the development of volcanic reservoir fields that were discovered in 2009 but sparsely drilled until now. Development drilling at NSE-F6, where we achieved the highest flow rate in that field to date at 600 BOPD net to Pan Orient, and success in pushing the estimated oil / water contact for 3P reserves down 60 meters at the NSE North field, are two examples of going back to earlier discoveries and starting to systematically develop them. Management believes this temporary refocus on the volcanic reservoirs for the remainder of 2011 will have not have any negative impact on the projected 2011 exit rates particularly in light of the most recent result with the NSE-F6 well.

In late October 2011 the company will be piloting new technology at an existing producing horizontal well in the Bo Rang "A" volcanic field. The objective of this technology is to reduce water production from high permeability fractured zones where early water breakthrough is most likely to have originated and increase oil production from the much larger portion of the wellbore that is micro fractured and oil saturated. In the success case of this pilot, an additional purpose specific horizontal well will be drilled as a further confirmation. Depending on the results of the pilot and follow up confirmation well, Pan Orient will consider the redevelopment of the majority of our existing volcanic reservoir fields.

Concession L53 (Pan Orient 100% working interest and operator)

Pan Orient plans to commence the drilling of one firm exploration well in late November or early December 2011 utilizing a second rig that is available from the same operator providing drilling services in Concession L44 & L33.

Thailand Production

Thailand production is currently approximately 2,450 BOPD (net to Pan Orient) and oil production in the third quarter of 2011 averaged 2,000 BOPD (net to Pan Orient). With the expected three additional appraisal wells to be drilled in the NSE-F1 field, the drilling of an additional five volcanic reservoir development wells at the Bo Rang, NSE North and WBEXT (WBV2) fields, and one horizontal sandstone development well at the Wichian Buri field during the remainder of 2011, the Company expects to exit 2011 with oil production in excess of 3,500 BOPD (net to Pan Orient). Despite the reports of massive flooding during the 2011 Thailand monsoon season, operations continue unaffected to this point in time. Any potential future impact on operations from the flooding are believed to be temporary in nature and will be mitigated by the large tank storage capacity available within our main producing areas.

Upon the granting of Environmental Impact Approval for 15 locations at the WBEXT field, drilling through the first portion of 2012 will focus on the drilling of the "D" and "E" sandstone reservoirs within the proven WBEXT fault compartments and the recently discovered WBEXT East fault compartment. Additional exploration is also planned to target sandstone zones in the, as yet unproven, fault compartment adjacent to the WBEXT and WBEXT East fields.


Citarum PSC - Onshore Java (Pan Orient Operator & 77% Working Interest)

Site construction has been completed for the Jatayu-1 well, is currently underway for the Cataka-1 well, and will be followed thereafter for the third well location. All drilling services contracts have been awarded. The drilling rig is currently stacked in close proximity to the Cataka-1well location and will be moved onto the Cataka-1 well site and commence drilling upon the completion of the drill pad construction which is anticipated in mid-November 2011. The Cataka-1 well will be the first of a three well back to back exploration program that is anticipated to continue into the first two months of 2012.

Batu Gajah PSC - Onshore Sumatra (Pan Orient Operator & 97% Working Interest)

All forestry, environmental and AFE approvals are in place for a two well exploration program with the Tuba Obi Utara-2 (NTO-2) well and the Shinta-1well. Road access and land use agreements with the forestry plantation operator remain ongoing for Shinta-1 and are expected to be in place by year end. Commencement of drilling of the first well, subject to road access and land use negotiations, is anticipated in the first quarter of 2012.

East Jabung PSC - On/Offshore Sumatra (Pan Orient Operator &100% Working Interest)

As disclosed earlier, Pan Orient has been advised by the Government of Indonesia that it is the successful bidder for the East Jabung PSC. The official PSC signing ceremony is anticipated to take place anytime between late October and year end, at which time activities will commence for the drilling of the first well planned for late 2012.

South CPP PSC – Onshore Sumatra (Pan Orient Operator & 97% Working Interest)

Preparations are currently underway for a 200 line kilometer 2D seismic program in 2012.

Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand, Indonesia and in Western Canada.

This news release contains forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as "expect", "believe", "estimate", "should", "anticipate" and "potential" or other similar wording. Forward-looking information in this news release includes, but is not limited to, references to: well drilling programs and drilling plans, estimates of reserves and potentially recoverable resources, and information on future production and project start-ups. By their very nature, the forward-looking statements contained in this news release require Pan Orient and its management to make assumptions that may not materialize or that may not be accurate. The forward-looking information contained in this news release is subject to known and unknown risks and uncertainties and other factors, which could cause actual results, expectations, achievements or performance to differ materially, including without limitation: imprecision of reserve estimates and estimates of recoverable quantities of oil, changes in project schedules, operating and reservoir performance, the effects of weather and climate change, the results of exploration and development drilling and related activities, demand for oil and gas, commercial negotiations, other technical and economic factors or revisions and other factors, many of which are beyond the control of Pan Orient. Although Pan Orient believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Pan Orient Energy Corp.
    Jeff Chisholm
    President and CEO

    Pan Orient Energy Corp.
    Bill Ostlund
    Vice President Finance and CFO